ISRAEL ONYWKWERE
Rising African countries are among the fastest-growing regions in consumer spending, according to data from the World Data Lab and analysed by EBanx, a global technology company specialising in payment services for rising markets.
Economic giant Egypt will accelerate growth by 167% while smaller economies like Ethiopia will grow by an impressive 429% in the next decade. Kenya (115%), Morocco (107%), Ghana (106%), and South Africa (42%) are also mentioned in the analysis.
“Of the rising markets shaping the future of consumption, Africa is often overlooked,” says Wiza Jalakasi, director of Africa market development at EBanx. “However, the numbers tell a different story: the continent will be the second region to add more new consumers in 2024 – 10-million – only behind Asia and making Africa the next frontier for digital commerce.”
In addition, EBanx highlighted two other regions that have been standing out for their relevance and acceleration: India and Latin America. India is set to surpass the impressive mark of $5,4 trillion in consumer spending by 2034 – a 198% growth compared to the current $1,8 trillion.
This will place the Asian country as the third-largest market in the world behind only the US and China. In LatAm, Brazil (62%) and Mexico (54%) are leading the way – each surpassing $2-trillion in consumer spending over the next decade.
“This growth is directly linked to the digitalisation of the economy and the payment innovations these markets have been experiencing in recent years,” explains Rashmi Satpute, country director of India at EBanx. “During our recent Payments Summit, we heard from numerous global players that emerging countries are becoming increasingly important to their businesses. They have enormous digital potential that is catching the attention of the entire world.”
Data from Statista Market Insights featured in Beyond Borders 2024 – a digital payments and commerce report by EBanx – show that digital commerce in rising markets will grow six-fold between 2017 and 2027, at a rate of 20% per year, which is 7 percentage points higher than developed countries.
The digital economies of India, Latin America, and Africa together will surpass $1,3 trillion within three years, according to Payments and Commerce Market Intelligence (PCMI).
Industry leaders gathered at an event in Napa Valley had an in-depth discussion on the state of digital economies and payments in rising markets.
“One thing is linked to the other. While in India and Latin America, digital commerce has driven digital payments, in Africa we are seeing the opposite, with digital payments driving digital commerce.
“The context and challenges of each impact the means, not the end, because the result of this digital revolution is very similar in all these regions: economic development, financial inclusion, and innovation,” says Juliana Etcheverry, Director of Country Growth: Latin America at EBanx.
Due to the low penetration of credit cards, barriers related to banking access, and consumer behaviour, fintechs and governments began seeking solutions to simplify consumers’ lives and allow them to purchase products and services using local payment methods. The result of this has been a transformation in the way people engage with digital commerce in emerging markets.
Alongside other rising economies, African countries are examples of how emerging markets have been leading in payment innovation. It has been 17 years since the continent embraced mobile money – a financial service that allows users to pay and exchange values through a cellphone – with no need for an Internet connection or a bank account. It accounts for nearly half of the total digital commerce in Kenya, for example – $2,3 billion, or 48% of the market – according to PCMI data.
Including mobile money, APMs will represent around 63% of African digital commerce by 2025.
“This landscape is promising, but there are still challenges that need to be addressed such as high market fragmentation and a lack of interoperability. In Napa Valley, industry experts advocated for strategic partnerships to connect Africa with the rest of the world. And that is exactly what EBanx has been doing,” Jalakasi says.
